Tokyo Electric sees profit without rate hike: paper

Reuters Staff

4 Min Read

Tokyo Electric Power Co's (TEPCO) President Naomi Hirose, the operator of tsunami-crippled Fukushima Daiichi plant, speaks to the media after meeting with Japan's Economy, Trade and Industry Minister Toshimitsu Motegi to talk about the safety approval of TEPCO's world's largest Kashiwazaki Kariwa nuclear plant for its restart, at Motegi's ministry in Tokyo September 27, 2013.Toru Hanai

TOKYO (Reuters) - Tokyo Electric Power Co, the operator of the crippled Fukushima plant, will likely turn a profit for the first time in three years in the current business year, without raising electricity rates or restarting reactors, its president was quoted as saying on Sunday.

Naomi Hirose's remarks in the Asahi Shimbun daily come after the utility on Friday applied to restart its Kashiwazaki Kariwa nuclear plant in northwestern Japan, a key step in its planned recovery plan from the Fukushima disaster.

"There is a possibility of (Kashiwazaki Kariwa) restart within the next business year. It is more acceptable (for financial institutions) that we put off some maintenance into the next business year," the Asahi quoted Hirose as saying in an interview.

"If we press ahead with cost cuts steadily, we can turn profitable this business year."

Hirose said the likelihood that a restart at Kashiwazaki Kariwa could shore up next year's profitability has made it easier for its creditor banks to accept the utility's plan to postpone part of its maintenance works into next year, an earnings boost for this year, the Asahi quoted Hirose as saying.

The Kashiwazaki Kariwa facility is the world's largest nuclear plant, and resuming its reactors would cut down on huge fuel costs the company now shoulders for thermal power generation.

Final approval to resume power generation at the facility, some 300 km (180 miles) northwest of Tokyo, is uncertain and any decision would take many months at best.

Tokyo Electric has not announced its official earnings forecasts for the current business year to March 31, citing uncertainty over the restart of the Kashiwazaki Kariwa plant.

Company spokesman Hiroshi Itagaki said returning to recurring profit at the parent-only basis this business year was in line with existing company policy.

"Following the Fukushima accident, the company has been in the red for two years in a row. A loss this year would make it three consecutive years, which is impermissible as a corporation," he told Reuters.

Postponing some non-urgent maintenance works on its distribution network into the next business year starting April 2014 is one option for the utility, he said.

Tokyo Electric has posted more than $27 billion in net losses since the Fukushima disaster, in which a powerful earthquake and tsunami knocked out cooling systems and triggered fuel meltdowns.

Two and a half years after the accident, the world's worst nuclear disaster since Chernobyl in 1986, Tokyo Electric is still struggling to control leakage of contaminated water into the ocean.

In a separate interview with the Yomiuri Shimbun daily on Sunday, Hirose said he had no intention of again using the No.5 and No.6 reactors at the Fukushima plant - two units at the site that survived the 2011 tsunami - to generate power.

Prime Minister Shinzo Abe earlier this month visited the Fukushima complex and requested that the two reactors be decommissioned. Tokyo Electric then said it would make a decision on the fate of the reactors by the end of the year.